Investment funds body says Canadian standards are needed
Proposals from the Canadian Sustainability Standards Board (CSSB) on disclosure standards have the support of the Investment Funds Institute of Canada (IFIC).
IFIC has given its backing to the standards that would align closely with the International Sustainability Standards Board’s (ISSB) standards. In a submission to the CSSB it says that Canadian standards are needed because “sustainability and climate-related disclosures are currently not complete, consistent or comparable, and quantitative information is only provided voluntarily.”
The CSSB announced its first proposed Canadian Sustainability Disclosure Standards in March stating that it marked a significant milestone in advancing sustainability reporting in Canada. The CSA welcomed the proposals at the time.
"With the release of the first proposed Canadian Sustainability Disclosure Standards, we’re taking a significant step towards ensuring that sustainability is not just a buzzword but a fundamental aspect of our economic fabric,” Charles-Antoine St-Jean, Chair, CSSB, said when unveiling the new proposals. “Our goal is to empower organizations to not only communicate their sustainability performance effectively but to drive meaningful action towards a more sustainable future for all."
In its submission, made last week, IFIC says that reliable disclosures are essential for investment fund managers to determine the risks and opportunities in individual securities and to guide corporate engagement and proxy voting activities.
Fund managers also need disclosures to meet their own sustainability and climate-related investment objectives and to ensure compliance with regulators’ requirements.
“Investment funds are an indispensable vehicle for investors seeking to achieve their long-term financial goals,” says Andy Mitchell, President and CEO, IFIC. “We support initiatives that strengthen sustainability reporting in ways that will benefit markets, funds, and investors.”
In a letter to CSSB vice-president of Sustainability Standards, Lisa French, IFIC’s vice-president of Research & Statistics, Ian Bragg, asked that several considerations be included in the proposals:
- Scope – IFIC wants the standards to go beyond the climate-related disclosures called for by the CSA. Broader requirements would support investment funds’ need for high-quality data.
- Annual Reporting Timelines for Reporting Entities – Harmonizing sustainability and financial
disclosures requires careful consideration to ensure that those firms that are not currently reporting on a voluntary basis have time to prepare.
- Proportionality – to ensure that smaller firms have more time to prepare and implement the required disclosure standards.
- Inclusion of Safe Harbour Provisions – Inclusion of safe harbour provisions related to climate change scenario analysis is crucial and will encourage issuers to provide more transparent and robust climate risk disclosures.
